Automated teller machine

An automated teller machine (ATM) is an electronic telecommunications device that enables customers of financial institutions to perform financial transactions, such as cash withdrawals, deposits, balance inquiries, and fund transfers, at any time and without the need for direct interaction with bank staff.

History

The first ATM was introduced in the 1960s. The concept of a self-service machine for banking transactions was first developed by Luther George Simjian, who registered patents for an ATM in the 1930s. However, the first operational ATM was installed by Barclays in London in 1967, developed by John Shepherd-Barron.

Components

ATMs typically consist of the following components:

• Card reader: Reads the magnetic stripe or chip on the customer's bank card.
• Keypad: Allows the customer to input their PIN and transaction details.
• Display screen: Provides instructions and information to the customer.
• Cash dispenser: Dispenses cash to the customer.
• Receipt printer: Prints transaction receipts for the customer.
• Depository: Accepts deposits of cash and checks.

Security

ATMs are equipped with various security features to protect against fraud and theft. These include:

• Encryption of data transmitted between the ATM and the bank's central system.
• PIN protection to ensure only authorized users can access accounts.
• CCTV cameras to monitor and record activity around the ATM.
• Anti-skimming devices to prevent the unauthorized capture of card information.

Types of ATMs

There are several types of ATMs, including:

• On-site ATMs: Located within or near bank branches.
• Off-site ATMs: Located in places such as shopping malls, airports, and convenience stores.
• White-label ATMs: Operated by non-bank entities but connected to the banking network.
• Brown-label ATMs: Owned by a service provider but operated under the brand of a bank.

Usage

To use an ATM, a customer typically follows these steps: 1. Insert their bank card into the card reader. 2. Enter their PIN using the keypad. 3. Select the desired transaction type (e.g., cash withdrawal, deposit). 4. Follow the on-screen instructions to complete the transaction. 5. Retrieve their card, cash, and receipt.

Advantages

ATMs offer several advantages, including:

• Convenience: Available 24/7, allowing customers to perform transactions outside of bank hours.
• Accessibility: Located in various locations, making it easy for customers to access their funds.
• Efficiency: Reduces the need for bank staff to handle routine transactions.

Disadvantages

Despite their benefits, ATMs also have some disadvantages:

• Security risks: Vulnerable to skimming, phishing, and other types of fraud.
• Technical issues: Can experience malfunctions or run out of cash.
• Fees: Some ATMs charge fees for certain transactions, especially for non-customers.

See also

• Banking
• Debit card
• Credit card
• Electronic funds transfer
• Point of sale